4 big analyst cuts: Bilibili drops on JPMorgan downgrade, Carvana cut at MS

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4 big analyst cuts: Bilibili drops on JPMorgan downgrade, Carvana cut at MS
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Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Bilibili, Carvana, Estée Lauder, and Kodiak Sciences.

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Bilibili falls on JPMorgan downgrade

Bilibili (NASDAQ: BILI ) shares fell more than 2% premarket today after JPMorgan downgraded the company to Underweight from Overweight and cut its price target to $13.00 from $27.00.

While the bank acknowledges Bilibili's strong user engagement among China's Generation Z users, they become increasingly cautious about the company's monetization outlook. As a result, the firm adjusted its revenue estimates for 2023 and 2024, which now stand 8% and 11% below the consensus estimates.

Our key concerns: 1) we believe competition in China’s mobile game market has intensified since 2Q23, and thus the hit-and-miss risk for new mobile games (especially Pretty Derby) has increased; 2) we have become more cautious on the live streaming revenue (booked in VAS) outlook in 2023 due to higher regulatory risk (JPMe 2023 VAS revenue is 8% below consensus).

Carvana cut to Underweight at Morgan Stanley

Morgan Stanley downgraded Carvana (NYSE: CVNA ) to Underweight from Equalweight with a price target of $35.00 (from $12.00), as reported in real time on InvestingPro.

According to the firm, it has significantly adjusted its model based on Carvana's stronger-than-expected Q2 earnings reported last week, outlook, and actions taken by the company to enhance its capital structure.

We think much of the rally is deserved but the stock has run well above our increased target driving a less favorable risk-reward vs. our coverage.

2 more downgrades

Estée Lauder (NYSE: EL ) received its sixth downgrade in two months as Jefferies moved to the sidelines. The firm cut its rating to Hold from Buy with a price target of $190.00 (from $270.00).

UBS downgraded Kodiak Sciences (NASDAQ: KOD ) to Neutral from Buy and cut its price target to $4.00 from $15.00. This represents the fifth downgrade this month.

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